The Markets

LAGOS (Capital Markets in Africa) – Nigeria’s biggest banks have found a way of shielding earnings from another year of tepid credit demand — buying up local government bonds that offer among the highest yields in emerging markets. Lenders are reducing credit to companies and consumers hampered by challenges in an economy too dependent on oil — the prices of which have tumbled nearly 30 percent since October. Steep inflation, a lack of foreign exchange and high levels of…

CAIRO (Capital Markets in Africa) – Egypt wants to tear down a strategy that’s left one of the Middle East’s most indebted countries hooked on short-term borrowing. The government is looking to raise the share of longer-dated debt to about 70 percent of annual domestic issuance by 2022 from 5 percent in the last fiscal year, Deputy Finance Minister Ahmed Kouchouk said in an interview. In making a “gradual shift” away from short-term T-bills and toward instruments such as Treasury…

LAGOS (Capital Markets in Africa) – Investors added money to emerging-market exchange-traded funds at the slowest pace this year last week, another sign that the optimism from the start of 2019 is wearing thin. Inflows into U.S.-listed funds that invest across developing nations as well as those that target specific countries totaled $313.1 million in the five days through Feb. 15, a fraction of the $3.97 billion inflow in the previous week, according to data…

LAGOS (Capital Markets in Africa) – Nigerian Breweries Plc (NB) FY’18 results, top line growth came in at N324.4 billion (-5.9% YoY) for the year, in line with our estimate of N320.6 billion (+1.2% deviation). In the same vein, after-tax earnings declined by 41.1% YoY to print at N19.4 billion, although under-performing our estimate of N22.2 billion. The deviation from our profit-after-tax estimate was as a result of negative surprises stemming from higher direct costs, finance…

HARARE (Capital Markets in Africa) -Zimbabwe’s central bank is considering devaluing its quasi-currency as part of a raft of reforms to the nation’s foreign-exchange system, according to a central bank official. Depreciating the so-called bond notes would be an acknowledgment that the official one-for-one exchange rate is no longer sustainable. It would also mark the second major overhaul to Zimbabwe’s currency regime since October, when the central bank ordered lenders to separate deposits of U.S. dollars and…

CAIRO (Capital Markets in Africa) – Egypt is returning to the dollar debt market to benefit from renewed investor confidence in the economy after sweeping reforms and support from the International Monetary Fund. The government is offering benchmark-sized tranches maturing in five, 10 and 30 years, according to a person familiar with the matter. The initial pricing target is more than one percentage point over last year’s three-part deal that raised $4 billion across similar maturities. Egypt plans to sell as…

LAGOS (Capital Markets in Africa) – With the U.S.-China trade dispute dominating headlines this year, idiosyncratic risks in emerging markets have played second fiddle to concerns over global growth. South Africa, Nigeria, Thailand and Russia each gave money managers a reminder of how quickly local issues can flare up over the past week. It happened just as some investors were starting to ask if the emerging-market trade was getting overcooked. A Bank of America Merrill Lynch survey…